ASEAN focus, southern star: Halim bin Saad provides a Malaysian perspective on New Zealand's role in South-east Asia.

• Author: Saad, Tan Sri Halim bin
• Position: Essay

Although New Zealand was one of the first nations, together with Australia and Japan, to embrace ASEAN as a partner when it became ASEAN's dialogue partner in 1975, economic relations between New Zealand and her ASEAN partners can best be described as lukewarm. New Zealand has yet to make a real impression on the ASEAN economic wave. New Zealand has made good progress on the diplomatic front in the past ten years, setting the stage for closer economic cooperation with ASEAN. However, New Zealand is still far behind in terms of actual economic engagement. New Zealand businesses have yet to lose their fear of going abroad into the region.

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For all its achievements, New Zealand has long been regarded as a star in the southern Pacific. But ask anyone in Singapore or Jakarta what they associate New Zealand with, the answers invariably are All Blacks, Lord of the Rings and sheep. More sheep than people, some may add knowingly. It seems that apart from sporting excellence and natural splendour, New Zealand is regarded as a friendly but somewhat distant neighbour. Economic relations between New Zealand and her ASEAN partners are improving, but they can best be described as lukewarm. In 2014 New Zealand exports to the region were worth a little over US$4 billion, where US$2.5 billion was dairy and the rest agricultural products. In perspective, ASEAN imported US$1.2 trillion worth of goods in that year. Little wonder then that New Zealand, other than herculean men in rugby shorts and fresh milk, has yet to make a real impression on the ASEAN economic wave.

ASEAN comprises ten countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. This bloc of nations was originally established in 1967 with only five countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand) for security and political purposes mainly as a response to the threat posed by communism in the 1960s.

ASEAN today is defined by its ten-member bloc with a combined GDP of more than US$2.4 trillion growing at a rate of 6 per cent per annum and a population of 620 million. Despite the 1997 Asian financial crisis, which brought ASEAN members to their knees, the bloc had restored a stable and resilient economy that was sufficient to withstand the 2008 global financial crisis.

Ranked the seventh largest in the world, the ASEAN economy cannot be ignored as an economic powerhouse with much growth potential. At US$1.2 trillion the value of ASEAN's exports represents 50 per cent of its GDP and 7 per cent of global exports. The purchasing power of ASEAN is demonstrated by its consumer expenditures of $1.7 trillion, which are expected to reach $2.3 trillion by 2020. Should the current growth trends continue, we will see ASEAN becoming the fourth largest economy by 2050 after the European Union, the United States and China. International investors have already recognised this trend, as revealed by the amount of foreign direct investment flowing into the bloc. As of today, the investment inflow to ASEAN (US$128 billion) has already surpassed that of China's (US$117 billion). More and more of the world's largest companies call ASEAN their home. ASEAN hosts 227 of these companies with combined revenues of more than US$1 trillion.

Longstanding relationship

The relationship between New Zealand and South-east Asia pre-dates the formation of ASEAN. New Zealand joined seven other nations in SEATO, which was formed to defend the region from the expanding influence of communism. Despite its name, SEATO's membership included only two South-east Asian nations --Thailand and the Philippines.

It is no simple task to deal with a region consisting of more than ten countries, each with different cultural, political and economic backgrounds. The formation of ASEAN gave birth to a convenient platform not only for internal co-operation between its members but also for a collective voice in dealing with external nations.

New Zealand was one of the first nations, together with Australia and Japan, to embrace ASEAN as a partner when it became ASEAN's dialogue partner in 1975. For the next 30 years, its diplomatic engagement with its ASEAN counterparts was very much limited to the dialogue until 2004, when the ASEAN--New Zealand--Australia summit to commemorate the 30th anniversary of partnership was held in Vientiane. The idea of having a well-defined and meaningful partnership was conceived during that gathering.

The agreement establishing the ASEAN--Australia--New Zealand Free Trade Area was signed in February 2009 and came into effect in the following January. With the exception of the frontier members--Cambodia, Laos, Myanmar and Vietnam --the free trade agreement is to be fully implemented by 2015.

Joint declaration

In July 2010 the framework for the partnership was outlined and adopted via the ASEAN--New Zealand Joint Declaration on Comprehensive Partnership for 2010-15 and the Plan for Action to Implement the Joint Declaration. These two instruments set the blueprint for co-operation in lour main areas:

* political and security co-operation

* economic co-operation

* socio-cultural co-operation

* initiative for ASEAN integration

New Zealand has also been continuously participating in bilateral initiatives by ASEAN, such as the ASEAN Defence Ministers' Meeting Plus, ASEAN Regional Forum and the East Asia Summit.

New Zealand has made good progress on the diplomatic front in the past ten years, setting the stage for its businesses to venture out into ASEAN. Elowever, New Zealand is still far behind in terms of actual economic engagement. To put this in perspective, the export value of goods and services from New Zealand to ASEAN, at $4.3 billion, is less than 10 per cent of New Zealand's total exports. That is a small percentage, considering that ASEAN is the next most geographically convenient market after Australia. Let us not even try to calculate New Zealand's market share of the $1.1...